Chinese stocks rally on state-firm merger report

Chinese stocks rally on Monday, while other Asian markets close mixed.

Hong Kong and Shanghai markets rallied on Monday, each hitting a new seven-year high, as Chinese oil and shipping shares surged on reports of possible mergers among China’s largest state-owned businesses.

The Hang Seng Index
HSI, -0.44%
was up 1.3% to 28,433.59, its best close since the end of 2007. The mainland-China-tracking Hang Seng China Enterprises
HSCEI, -0.29%
added 1.7%.

On the mainland itself, the Shanghai Composite Index
SHCOMP, +0.54%
advanced 3% to 4,527.40, the first settlement above 4,500 since February 2008.

Oil and shipping shares rose sharply in both markets, after a state media report said the Chinese government may cut the number of central government-owned big companies through massive mergers.

Meantime, Sino-British banking giant HSBC
0005, +0.61%HSBC, -0.08%HSBA, +0.13%
— the heaviest-weighted component of the Hang Seng Index — jumped 3.6% after a report in the Sunday Times said the company is considering plans to sell its British retail unit for 20 billion pounds ($30.4 billion). The gains added to a previous 4.2% rally, which came after HSBC said it is looking at whether to move its headquarters out of London.

In Shanghai, shares of several big oil and shipping companies were suspended from trading after soaring limit-up by 10%. They included Sinopec, PetroChina, China Shipping Container Lines, China Cosco, and China Shipping Development Co. Ltd.
600026, +0.28%

Other Asian markets were mixed. Japan’s Nikkei Average
NIK, +1.23%
edged down 0.2%, with the broader Topix
I0000, +0.84%
flat. The yen
USDJPY, +0.99%
was a little weaker, with the greenback buying ¥119.21, compared with ¥118.99 late Friday in New York.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.